Schaeffer's Midday Options Update Features General Motors, Delphi, Intuit, and CBS Corp.

CINCINNATI -- Today's Schaeffer's Midday Options Update features General Motors (NYSE:GM), Delphi (Pink Sheets:DPHIQ), Intuit (NASDAQ:INTU), and CBS Corp. (NYSE:CBS). The Midday Options Update contains a brief commentary on the day's most notable activity and a table listing the most-active calls and puts for the day. The Midday Options Update is published every day at www.SchaeffersResearch.com - the home of Bernie Schaeffer and Schaeffer's Investment Research. For additional information about this report or to have it delivered to you free via email every day click on the following link. http://www.schaeffersresearch.com/redirect.aspx?CODE=PRMOU12M&PAGE=1 .

Options Update: News From General Motors, Intuit; Options Trading on CBS Corp.

In a change from recent tradition, the market actually opened higher this morning, but had failed to protect its modest gains by the time the lunch hour rolled around. Some economic news hit the wires this morning, but nothing will compare to tomorrow's hotly anticipated nonfarm payrolls figures for February. Until then, we can digest the trade-gap report for January. The nation's deficit in international trade of services and goods swelled by 5.3 percent to a record $68.51 billion, up from December's revised reading of $65.07 billion. This reading was beyond the deficit of $66.8 billion that economists were expecting.

News that the Bank of Japan will retain its zero interest-rate policy helped calm the bond market, which had been in decline mode on fears of an impending across-the-board global rate hike. The yield curve returned to normalcy, as well, with the yield on the two-year note dropping back below the 10-year bond yield.

International House of Rate Decisions

The Bank of Japan has decided to put an end to one of the nation's biggest monetary rescue efforts in history. Central bank officials in the land of the rising sun decided that economic and price conditions favored the return to more normal monetary-policy position. The nation had adopted a quantitative easing policy, which consisted of funneling cash into the economy in order to combat deflation and provide nearly infinite liquidity. Moving forward, the bank is leaving short-term interest rates near the zero-percent mark for the time being, but will gradually move to reduce the amount of money being injected into the country's banking system.

Driving Excitement

General Motors (NYSE:GM) is trading more than three percent higher today, helping single-handedly raise the Dow Jones Industrial Average (DJIA) by nearly five index points. The primary catalyst behind the automaker's rise was reports suggesting the firm is nearing a cost-cutting deal with Delphi (Pink Sheets:DPHIQ), its leading supplier of parts. According to The Wall Street Journal, the two beleaguered companies are nearing an agreement with the United Auto Workers (UAW) union that would encourage early retirement by thousands of workers. Firing back, a UAW spokesperson refuted these claims and noted that the media is "doing a tremendous disservice to our membership and the negotiations process by suggesting the parties are close," adding "There are many, many, significant issues to be resolved."

Turbo-Boosted

Earlier today, Intuit (NASDAQ:INTU) boosted its revenue and earnings outlooks for its fiscal third-quarter reporting period and the year. The company cited stronger-than-expected sales of TurboTax for this upward adjustment. Third-quarter revenue is now expected to increase, on a year-over-year basis, by five-to-eight percent, rising to $880 million to $900 million. INTU had previously projected a revenue increase of three to five percent. Earnings are expected to rise to $1.56 to $1.60, compared with the prior outlook of $1.54 to $1.58 per share. For the full year, revenue is expected to surge 10-to-12 percent to $2.24 billion to $2.28 billion, up from prior growth forecasts of 9-to-11 percent. Earnings for the fiscal year are targeted at $2.18 to $2.23 per share, up from $2.16 to $2.21 per share as previously expected. The stock is up more than six percent today, but failed to clear its 80-day moving average.

Most-Active Options Update

At 1:28 p.m. Eastern time, 2,340,436 calls have changed hands versus 1,704,066 puts, equaling a single-day put/call volume ratio of 0.72. The CBOE's equity put/call volume ratio weighed in at 0.92.

CBS Corp.

One equity we have our "eye" on (groan!) today is CBS Corp. (NYSE:CBS) , the broadcasting half of the giant media conglomerate formerly known as Viacom. The company owns the CBS and UPN network channels, cable's Showtime network, as well as the CBS Paramount Television and King World production arms.

Options activity is running rampant on the broadcaster today, so I hunted around for any news that might have impacted the shares. Earnings were reported a few weeks ago, so there is not a major event coming up. The only news I found on Marketwatch concerned the rumored sale of large-screen movie theater chain Imax, which has reportedly received "several unsolicited inquiries." Media names, on the whole, have moved higher in response. Additionally, former offspring of Viacom, Blockbuster (BBI) , is lower today on an 11-percent decrease in fourth-quarter revenue. CBS itself is splitting the difference, hovering right near the breakeven zone.

Technically speaking, CBS shares haven't enjoyed good nights or good luck, especially over the short term. The stock has been spiraling gradually lower since early February, beneath the short-term resistance of its 10-day and 20-day moving averages. Since peaking on January 30, CBS has surrendered more than 12 percent of its value.

Panning back for a long-term view, it appears as though the equity hasn't been much of a "survivor" of late, as it has been outwitted and outplayed by its 80-week moving average. The stock has been rebuffed at the site of this trendline on several occasions in recent years. CBS has definitely favored the downside track since mid-2003, dropping almost 50 percent in this three-year time span.

In today's options action, CBS has seen more than 11,000 calls change hands at the just-out-of-the-money April 25 strike (CBS DE). Heading into today, there were only a scant 1,925 open contracts open on this option. In other words, the safe bet is that much of today's volume will ultimately translate into new open interest. The lion's majority of the volume was comprised of two block trades. Blocks of 8,000 and 2,000 traded just before 11:30 a.m., and were indicated as a "spread." Strangely enough, the next-highest option volume on CBS today has seen just 138 contracts trade hands. The clue could be in the pricing. The block of 2,000 went off at the ask price of 0.45, while the block of 8,000 was traded at 0.40, between the bid and the ask. Perhaps the smaller block was initiated as purchases, and the larger sold? Perhaps the position was sold to hedge against an existing stock holding? We'll have to wait and see how the translations shake out tomorrow.

There is one thing I know for certain . . . if these 11,000 contracts translate, it will certainly impact the stock's Schaeffer's put/call open interest ratio (SOIR) reading. Currently, across the March and April series, there are only 9,441 open calls and 6,492 open puts, amounting to a SOIR reading of 0.68. Adding 11,000 calls to the mix would certainly shrink this reading. CBS has not been optionable long enough to derive an annual percentile rank of this figure.

Analysts are also happily tuned to CBS, awarding 10 "buys," nine of which are of the "strong" variety. There is just one outright "sell" on this stock, and seven "hold" ratings. This bravado from the Wall Street community seems incongruous, given the equity's poor price action, but that's what contrarian investing is all about. Currently, CBS scores a Schaeffer's Equity Scorecard rating of 4.0, suggesting its future path is likely flat to lower.

Click the following link to see a Weekly Chart of CBS Since May 2003 With 80-Week Moving Average: http://www.schaeffersresearch.com/wire?ID=15501 .

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About Schaeffer's Investment Research (www.SchaeffersResearch.com)

Schaeffer's Investment Research, founded by Bernie Schaeffer in 1981, is a financial information and trading resources company. It publishes Bernie Schaeffer's Option Advisor, the nation's leading options subscription newsletter. The firm's contrarian approach focuses on stocks with technical and fundamental trends that run counter to investor expectations. The firm's website, http://www.SchaeffersResearch.com , is recognized as one of the leading information sources for stock and options traders and was cited as the top options website by both Forbes and Barron's. Click here for more details about Schaeffer's trading methodology: http://www.SchaeffersResearch.com/method .